The co-founder of a Southwestern Ontario cannabis company was ordered to pay $350,000 for disclosing confidential information about the company's expansion plan to a friend, who engaged in insider trading of its shares.
The Capital Markets Tribunal, an independent division of the Ontario Securities Commission, determined Michael Kraft, the then-chairperson of WeedMD's board of directors, emailed friend and businesses associate Michael Stein copies of the draft agreements of the company's plan to lease a Strathroy greenhouse on Oct. 23, 2017.
Stein, a business consultant and former banker who wasn't working in any capacity for WeedMD, now known as Entourage Health, bought $68,525 worth of WeedMD shares a day before the greenhouse deal was disclosed — a move that significantly increased the company's production capacity — and sold those shares over the next two days for a profit of $29,345.
Kraft was fined $200,000 and ordered to pay $150,000 in costs to the commission, according to a decision by the three-person panel released last week. "Kraft's tip to Stein was deliberate, and not done in error. Kraft did not turn his mind to whether the disclosure was in the necessary course of business," the panel wrote in its decision.
Read more at lfpress.com